A strategic framework for defining and segmenting markets

A market consists of customers (actual and potential), needs, products, technologies and competitors. One of the most difficult challenges managers face is how to define relevant and pre–segmented markets. A market definition too narrow limits potential opportunities; one too large leads to mass marketing thinking and can make an organization's efforts and resources seem almost insignificant. This article reviews useful market terminology and explains how a field–tested, multipartite framework which is rooted in the strategic marketing literature can be used for developing practical and optimal market definitions and segmentation approaches for business and high–tech companies. In addition, managenal and academic implications of this new approach are presented.